Would Declining Exit Rates from Welfare Provide Evidence of Welfare Dependence in Homogeneous Environments?

Negative duration dependence in the exit rate from social assistance is an important issue addressed in the dynamic welfare participation literature. If heterogeneity is properly modelled, the decline of the exit rate is ascribed to a progressive reduction of the capability to get off welfare due to the detrimental effects of the benefit as time in welfare increases (Blank, 1989; Sandefur and Cook, 1998; Dahl and Lorenzen; 2003; Gangl, 2003, Chay et al, 2005). The aim of this paper is to show that the potential corruptive effects of benefits are not easily identified with this analytical strategy. As a starting point we develop a model, coherent with the Bane and Ellwood (1994) theoretical framework, that describes the causal links occurring between work/unemployment, poverty and social assistance. A simulation study is carried out in order to show that negative duration dependence in the exit rate from welfare may arise in environments where no corruptive effects of benefits are at work, even in the absence of heterogeneity at the onset of the process. Thus, negative duration dependence in the exit rate from welfare does not imply ‘welfare dependence’: the observed pattern may be due to effects of persistence in poverty or in unemployment.

Welfare Stigma Allowing for Psychological and Cultural Effects. An Agent-Based Simulation Study

We investigate the effects of income support on unemployment and welfare dynamics when stigma is attached to welfare provision. Stigma has been modelled in the literature as a cost of entry into welfare. Allowing for psychological factors, we assume that with stigma welfare provision leads to lower search effectiveness; moreover, we allow for interaction among agents. Carrying out an agent-based simulation study, we find that welfare take-up rates decrease with stigma while welfare spells get longer. Unemployment rates are not monotonically related to the amount of stigma, implying that we can find higher levels of unemployment with stigma than with no stigma.job-search, welfare dependence, stigma, Agent-Based modeling, longitudinal data.

Active and Passive Policies Against Poverty with Decreasing Employability

In this paper we propose a non-equilibrium model in order to explain the search behavior of unemployed workers. This modeling strategy, framed in a rational choice paradigm, allows us to investigate the effects of negative duration dependence in the out-of-unemployment hazard rate, accounting for a decrease in employability as the unemployment spell lengthens. We show that individuals react to an expected reduction in their search effectiveness by increasing their search efforts. We then analyze active and passive labor market policies, consisting in training programs and income support schemes. We show that it is optimal for the government to include among the eligibility criteria for subsidized training a minimum length of the unemployment spell. However, it is optimal to recruit workers before they become discouraged and stop searching. We also show that for a broad range of the parameters the optimal income support scheme takes the form of unemployment benefits granted for a limited amount of time starting from the beginning of the unemployment spell, coupled with social assistance for long-term unemployed with very limited residual employability.

Policies Against Poverty: an Evalution

We propose an agent-based model to investigate the effects of policies against poverty – income support, workfare policies and active labor market programs within different economic and institutional settingUnemployment, Poverty, Assistance, Agent-Based Model, Simulation, Genetic Algorithm

Welfare stigma with decreasing employability

We analyze the effects of income support on unemployment and welfare dynamics when stigma is attached to welfare provision. Stigma has been modeled in the literature as a cost of welfare participation; in this paper we analyze the effect of income support on unemployment and welfare dynamics by assuming that welfare stigma also leads to progressive loss of employability. Unemployment and welfare participation are studied under the cross-sectional and dynamic perspectives. While traditional models predict lower unemployment rates with welfare stigma, in our model unemployment rates follow a non-monotonic pattern: as a consequence, in addition to reducing take-up rates, welfare stigma may also contribute to increase unemployment.job-search models, welfare dependence, stigma, agent-based modeling, forecasting ability.

The Role of Family Background on Secondary School Choices

The aim of our work is to measure the impact of social origins on the choice of the academic track in order to allow for consistent cross-country comparisons. We analyze Italy, the Netherlands, and Germany, employing the data from PISA 2003. A substantive problem is that a good measure of individual ability before tracking occurs is not available, thus ability cannot be adequately kept under control. A simple model for school choice is proposed, but the model is not identified with cross-section data. The consequences of unobserved ability are assessed; in the absence of a measure of ability at time the track, the logit regression coefficient of social background is an estimate of the total effect of social background, given by the sum of direct and indirect effects. This is a measure of substantive interest because it represents the total causal effect of social origins on school track. Yet, given that regression coefficients in logit models with independent unobserved heterogeneity are biased towards zero, comparison across countries are difficult; the average sample derivative of the response probability is employed, and it is shown to be a valid alternative measure of the effect of explanatory variables in this context. Our main substantive finding is that the total effect of social background on the choice of the academic track is weaker in the Netherlands and stronger in Germany, with Italy somewhere in between, although, as the German case reveals, when access is regulated by formal restrictions based on ability tests the role of parental background is significantly reduced.equality of opportunity, intergenerational mobility, school systems, PISA, PIRLS.

Primary and secondary effects in educational attainment in Italy. Effetti primari e secondari nell’istruzione in Italia

equality of opportunity, school choices, educational policies.